Hong Kong virtual asset OTC trading custody services to be primarily regulated by the Securities and Futures Commission rather than the Customs

Odaily Planet Daily News Last year, when the Hong Kong Treasury Department consulted the public on virtual asset over-the-counter (OTC) transactions, it proposed that the Commissioner of Customs and Excise issue licenses and that the Customs and Excise regulate virtual asset OTC services. Hong Kong Treasury Secretary Hui Ching-yu explained that when it was proposed to hand over OTC to the Customs for regulation, some Legislative Council members expressed different opinions, including concerns about regulatory arbitrage. Later, it was found that the market operation model was more complicated than originally imagined. Some OTC institutions not only operated OTC services but also provided custody services at the same time. Therefore, it was hoped that the relevant transactions would be centrally regulated. Now the Hong Kong Securities and Futures Commission is defined as the main regulator. If (the service) involves banks at that time, the HKMA will be the front-line regulator. Hui Ching-yu also added that regardless of whether the virtual asset service provider will eventually be treated as a licensed arrangement, it will be fully anticipated to ensure that there are sufficient regulatory resources and other resources to handle license applications.